When real GDP is in equilibrium with no government and no international trade
A) real planned investment spending equals real planned saving.
B) real planned investment equals real planned consumption spending.
C) unplanned inventories are increasing.
D) unplanned inventories are decreasing.

Question

Quizplus · Accepted Answer

When real GDP is in equilibrium, it means that there is no unplanned change in inventories. This implies that real planned investment spending equals real planned saving (Choice A), since investment spending is a component of planned spending, and saving is a component of planned saving. Real planned consumption spending may or may not be equal to real planned investment, depending on the level of income, but it is not a determinant of equilibrium GDP.

When Real GDP Is in Equilibrium with No Government and No